The opposite of Obama
Instead of increasing government outlays, they must be cut. Instead of raising taxes, they must be lowered to encourage activity. Instead of nationalizing banks and insurance firms, the private sector should be boosted.
The grave economic crisis is causing a peculiar phenomenon. No one wants to be finance minister. A senior Likud member said that "only a Shi'ite suicide bomber will agree to take on such a portfolio." Strange, because we have learned that politicians seek power, influence, success and publicity. What has come over them?
They have been afflicted by the disease of populism. They do not want to be "the bad guy." They do not want to be the ones who will have to make cuts. They do not want to be the ones who will demand pay cuts in the civil service. They are not interested in having to do battle over the defense budget. They don't want to say "no" to the demands Shas will make for increasing child allowances. They are afraid of facing demonstrations of the unemployed. They are scared of criticism.
Politicians want to be loved by the public, and they think the public loves only those who hand out gifts and pile on the benefits. They are wrong. Right now is a good opportunity for anyone who takes on this job. Days of crisis actually allow ordinary politicians to emerge as leaders. It is now that such a politician can extricate the economy from the pit and be the one to always be remembered for it.
On the eve of the last election, the Labor party conducted a survey to see how the public ranks Israeli leaders in terms of economic abilities. Benjamin Netanyahu received the top marks, eight out of 10. Ehud Barak and Tzipi Livni scored one out of 10. Netanyahu was perceived by the public as "Mr. Economics" because of his unpopular program for rescuing the economy in 2003. Even though many continue to blame him to this day for the cuts he imposed on the public, they remember that he brought the economy out of recession and unemployment into growth and employment. Today they say, "Bibi killed us then, but he is the one who will save us now because he understands economics."
In 2003, there was a debate between two approaches. Amir Peretz, then-chairman of the Histadrut labor federation, backed by Labor and Meretz (and a few economics professors) claimed that government expenses should be increased, and so should taxes. But Netanyahu opted for the opposite direction. He cut government outlays and lowered taxes, while carrying out reforms. The move worked. Public confidence was restored and economic activity increased while unemployment dropped.
Now, once more, history is repeating itself. Ofer Eini, the current chairman of the Histadrut, says it is necessary for the government to spend without care and so do Labor and Meretz. And there are also economics professors who say taxes should not be lowered but raised. They are all paying heed to Barack Obama. If Obama can raise government spending by $2 trillion and raise the budget deficit to as much as 12 percent of the GDP, should we, the little guy, challenge the wisdom of the leader of the democratic world?
But we must object. In fact, not only object, but also reject Obama's irresponsible policy. Since he assumed office two months ago, American economic indicators have worsened. Unemployment has risen to 8.1 percent, the rate of layoffs is 650,000 per month(!), businesses are closing by the thousand, the major banks and insurance firms are on the verge of collapse. The stock exchange dropped 30 percent since Obama won the elections and fell by 20 percent since he took office and began carrying out his grandiose plans.
Obama is not only increasing expenses. He is also planning to raise taxes for all those making more than $250,000 a year. Later he might even be forced to raise taxes on the middle class, because it will be impossible to continue with such an enormous deficit for long.
This is our opportunity. We must do the exact opposite of what Obama is doing. Instead of increasing government outlays, they must be cut. Instead of raising taxes, they must be lowered to encourage activity. Instead of nationalizing banks and insurance firms, the private sector should be boosted. Instead of increasing government involvement, reforms should be undertaken to destroy monopolies and increase market freedom.
This is the right way to go. It will make Israel an island of stability and reason in a world that has lost its senses. Instead of the young leaving Israel, they will come back here from America. This is also the grand opportunity for the next finance minister. It is strange that no politician is interested in taking on the job.